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Bad Mortgages Widen Gmac Losses

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http://news.bbc.co.uk/1/hi/business/8183796.stm

Losses at finance group GMAC have risen by more than a half after bad debts increased at its mortgage business.

The company reported a loss of $3.9bn (£2.3bn) between April and June, up 56% on the $2.5bn loss it made a year ago.

The loss included a $1.2bn charge related to the firm's conversion from a partnership into a public company.

GMAC has received billions of dollars of government aid to combat mortgage losses and to provide funds for Americans to buy cars.

In December last year, the government stepped in with a $6bn bail-out.

In May this year, the US Treasury announced that it would provide a further $7.5bn in aid.

"The company lives and dies by its federal government support," said Sean Egan at Egan-Jones Ratings.

Excluding one-off charges, GMAC said its quarterly loss was $400m.

In the first quarter of this year, the company made a loss of $675m.

It had returned to profit in the fourth quarter of 2008 after more than a year of losses. However, those results were largely thanks to a one-off gain from a debt swap which reduced its interest payments.

GMAC was formerly the finance arm of carmaker General Motors. However, in 2006 it became an independent finance company after GM sold a 51% stake in the business.

In May of this year, GM further reduced its stake in the company.

Is the B&B still buying this crap from GMAC?

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